Chapter 11: Final positive cashflows

Hello

In the notes in section 2.1, there mentioned a point whereby we need to exclude positive cashflows from the later years to be prudent.

Is this really the method to be used in the exams? I don't see anywhere in the examples where this is done.

Thanks.

 

dont need to worry bout this

its just introducing the next section , your not going to be asked to be "prudent" , whatever that means , in an exam.

 

Ok, so when calculating the NPV, I don't have to exclude the last positive cash flow, right?

Cheers!

 

Are you talking about zeroising cashflows on unit-linked plans?

 

This comment (on prudence and ignoring future positive values) relates specifically to zeroising negative cashflows for unit-linked plans. I don't think it applies to NPV calculations.

 

Thanks Mark.